In April 2024, HUD released “Guidance on the Application of the Fair Housing Act to the Screening of Applicants for Rental Housing.” This guidance addresses the potential for discrimination in tenant screening practices for evaluating credit history, eviction history, and criminal records and offers recommendations for housing providers to improve the relevancy, accuracy, and transparency of screening practices to increase fair housing compliance.
Tenant screening criteria should be based on information that is relevant to whether an applicant will be a successful tenant. Housing providers should not reject applications for past incidents which are unlikely to recur, such as an eviction due to a job loss. Screening criteria that are not relevant for an applicant’s individual circumstances should be waived, for example a minimum income requirement may not be appropriate for an applicant whose rent will be paid by someone else. Housing providers should prioritize the most relevant records, such as the most recent records versus older ones, and should disregard records without a negative outcome such as an eviction filing where the tenant prevailed. Sources of income or financial resources in addition to employment income, such as SSDI or Housing Choice Vouchers, should be considered when assessing an applicant’s ability to afford rent.
The HUD guidance notes that some records commonly used for tenant screening often contain inaccuracies and cautions housing providers against using datasets that are incomplete, missing key personal identifiers, or updated infrequently. Housing providers should take into account that court records can mis-categorize a person’s criminal record history. Inaccuracies in criminal records or credit histories can be problematic when matching practices erroneously attribute records to the wrong person. Records should be matched using multiple identifiers, and “wildcard” or “name-only” matching should not be used.
The HUD guidance notes the importance of transparency to help ensure consistent, nondiscriminatory results, as well as providing applicants with sufficient information to decide whether to proceed with an application or to pay an application fee. The HUD guidance recommends that housing providers ensure that tenant screening policies should be in writing, made public, and readily available to potential applicants. Records outside the scope of the screening policy should not be considered. Denial letters should contain as much detail as possible as to all reasons for the denial, including the specific standard(s) that the applicant did not meet and how they fell short. The denial should attach all records that were used to make the decision, including any screening reports.
Applicants should be given the opportunity to dispute the accuracy or completeness of any negative information and to show that even if a negative record is accurate, they will able to comply with their tenancy obligations by challenging the relevancy of a standard or providing evidence of mitigating circumstances.
Increasingly, housing providers are relying on third-party screening services to evaluate potential tenants. The Fair Housing Act applies to decisions made using algorithmic or AI models, and housing providers are liable for discriminatory denials resulting from relying on these products. Rather than purchasing an “off the shelf” product, providers should customize the criteria, standards, and weights of a screening product to conform to their own evaluation criteria. Housing providers should make independent determinations, even when the screening report makes a recommendation to deny an applicant, and should provide applicants with an opportunity to dispute the accuracy or relevance of any negative information. Housing providers should select screening services that offer customizability, frequently update their data, monitor for unjustified discriminatory effects, report clear and specific reasons for denials, allow individuals to correct inaccuracies, publicly disclose key details about their screening systems and comply with all applicable federal, state, and local laws.
The Housing Equality Center of Pennsylvania offers free technical assistance to both nonprofit and for-profit housing providers. We can assist in reviewing your eligibility criteria, written applications for tenancy, and screening criteria to ensure compliance with all applicable fair housing laws. To request technical assistance, training, publications or to report discrimination, click here.
The work that provided the basis for this publication was supported by funding under a grant with the U.S. Department of Housing and Urban Development. The substance and findings of the work are dedicated to the public. The author and publisher are solely responsible for the accuracy of the statements and interpretations contained in this publication. Such interpretations do not necessarily reflect the views of the Federal Government.
